INTRODUCTION

he multilayered contributions of the climates. During the preparation of the 2000 report, the U.S. economy arts and arts-related activities rank was enjoying an unparalleled level of among the lesser known and un- prosperity that allowed it to expand heralded aspects of contemporary every month between March 1991 and March 2001, the longest economic American society. Beyond the intrin- expansion in the history of our nation. sic benefits of the arts—i.e. benefits In stark contrast, the last few years saw that serve to enrich an individual’s life the U.S. economy rocked by a number of both internal and external shocks experiences, standard of living and that resulted in sluggish growth rates, learning—advocates recently have demonstrated the crucial role anemic job creation, significant spikes played by the arts in generating a significant level of economic in energy costs, plunging revenue growth. In fact, highlighting the substantial private and public inflows and ballooning deficits at the T federal, state and local levels, among economic benefits from a thriving arts environment continues other negative developments. to be a theme often stressed by arts advocates of every stripe These negative developments had an immediate impact on state legisla- across the country. tive appropriations to art agencies; Consequently, the objective of of government, corporations and in- specifically, all but three SLC states this report* is to capture elements dividuals struggled to deal with the experienced negative growth in ap- of this theme by focusing on the 16 lingering effects of the 2001 economic propriations between fiscal years 2001 states that belong to The Council of recession, the terrorist attacks of Sep- and 2005. In fact, 11 of the 13 SLC State Governments’ Southern office, tember 2001, the teetering of the stock states that saw appropriation reduc- the Southern Legislative Conference market (2000-2002), the worst fiscal tions actually experienced double-digit 3 (SLC).1 This is not the first time that downturn to plague state governments reductions during this period. The the SLC has featured this topic among in decades and a number of other neg- state with the steepest drop was Mis- its publications, with the most recent ative economic developments. In such souri (-96 percent), while Arkansas’ 11 effort in November 2000,2 and the a fiscally challenging environment, the percent growth was the highest during SLC’s ongoing review of this topic is a ability of the arts community, a com- this time period. The other two states reflection of the recognition of its im- munity that relies largely on funding experiencing increases were portance to SLC economies and public from the public and private sectors (7 percent) and West Virginia (2 per- officials in the South. for survival, to adequately raise funds cent). The last five years saw the Ameri- proved to be extremely onerous. As Even for the nation as a whole, can economy face a series of unprece- a result, arts practitioners were forced the scenario was not that much more dented challenges that rippled across all to devise a range of alternate funding promising. In fiscal year 2005, the 50 levels of society. The arts community mechanisms in order to continue pro- state legislatures appropriated a total was certainly not impervious to these viding the crucial assistance necessary of $264.8 million to their state arts challenges, and artists and arts advo- for the support of artists and others in agencies, less than one-half percent cates in every part of the country faced the arts community. (about 0.05 percent) of the $547.3 their own set of obstacles in respond- The major difference that rapidly billion expended from state general ing to these economic shocks. In fact, surfaced in gathering information for funds. Given the severity of the state during these past few years, both public the current 2006 SLC report and the fiscal downturn in these past four years, and private sector funding for the arts previously mentioned 2000 SLC report appropriations as a percentage of state experienced severe stress as all levels was the radical change in economic general fund expenditures plunged

* In August 2005, the Southern Legislative Conference (SLC), with the assistance of the Southern Arts Federation (SAF), released a summarized version of this report at the 2005 Southern Governors’ Association meeting in Greensboro, .

The Economic Impact of the Arts in the South | 1 precipitously from a high of 0.09 per- Appalachian State University estimated events), 1,200 subscribers and cent in fiscal year 2001, to 0.06 percent that the total economic impact of the more than 500 active volunteers in 2003, to the previously mentioned non-profit arts industry amounted to that plays a 36-week season;12 0.05 percent in fiscal year 20044 $723 million alongside the fact that just » Maryland, in 2001, became the Notwithstanding these marked under 2 percent of all jobs in the state first state in the country to de- reductions in state appropriations, the were in the creative industry.8 velop Arts and Entertainment economic impact of the arts, both Despite the lean fiscal environ- (A&E) Districts on a statewide nationally and on a state-by-state basis, ment that ensued, a number of SLC basis as a way to stimulate the continues to notch remarkable num- states have experienced a surge in economy and improve quality bers. According to the latest Americans arts-related activities since the comple- of life. This legislation enables for the Arts report, released in June 2002, tion of the 2000 SLC report. The arts local jurisdictions, municipali- touted as the most comprehensive eco- community has forged ahead under ties, counties or a combination, nomic impact study of the non-profit tremendous odds in continuing to to apply for state designations arts industry ever conducted, Amer- promote arts-related activities and for the Arts and Entertainment ica’s non-profit arts industry gener- events so that more and more Ameri- Districts within their bound- ated $134 billion in economic activity, cans have the advantage of reaping the aries and offer tax incentives including $24.4 billion in federal, state, multi-faceted benefits of these activi- provided by the new law. An and local tax revenues.5 This mam- ties. A sampling of these events and A&E district—there currently moth $134 billion in economic impact activities in the SLC states includes the are 11 in Maryland—has been comprised $53.2 billion in spending by following: defined by Americans for the Arts arts organizations and $80.8 billion in » The Symphony Orches- as a well-recognized, labeled, event-related spending by arts audi- tra’s (ASO) $300 million goal mixed-use area of the city in ences. Not only did the $53.2 billion for a dramatic new concert hall which a high concentration of represent a 45 percent increase (up designed by the world famous arts and cultural facilities serves from $36.8 billion) over the period of architect Santiago Calatrava. as the anchor attraction;13 a decade (the previous Americans for the Approximately one-third of the » In St. Louis, Missouri, the Pu- Arts study was conducted in 1992), this funds already have been raised litzer Foundation for the Arts report also estimated that the overall by private donors for this proj- inaugurated its landmark build- economic impact resulted in 4.9 mil- ect.9 A September 2005 study ing designed by the renowned lion full-time equivalent jobs; $89.4 commissioned by the ASO indi- architect Tadao Ando in Oc- billion in household income; $6.6 bil- cates that the project, scheduled tober 2001. The Foundation’s lion in local government tax revenues; to open in 2011, would generate opening was another piece in $7.3 billion in state government tax $2 billion in economic growth the public-private partnership revenues; and $10.5 billion in federal through 2020, creating 2,100 to revive the once-neglected 10- income tax revenues. jobs in the community after block area in midtown St. Louis, Recent data from several SLC construction and $116 million referred to as Grand Center, states illustrates the impressive eco- in city, county and state tax focusing on art, education and nomic impact of the arts too. Accord- revenue over the facility’s first entertainment;14 ing to a January 2004 Atlantic decade of operation;10 » Following the tremendous University report, a total of $1.2 bil- » Berea, , trumpeted as achievement of bringing such lion was spent by the not-for-profit the arts and crafts capital of world-class exhibitions as the organizations, universities and colleges the state, where more than 50 1996 Palaces of St. Petersburg, that make up the arts and cultural in- galleries and fine crafts studios the 1998 Splendors of Versailles dustry in Florida; when ripple or mul- and the catalyst for this activ- and the 2001 Majesty of Spain tiplier effects were included, this figure ity, Berea College, continues to to Jackson, , in 2004, catapulted to $2.9 billion in gross state keep alive traditions and skills the Mississippi Commission for product that resulted in $877.8 mil- that span centuries;11 International Cultural Exchange lion in income (primarily payroll) and » Louisiana Philharmonic Or- staged the Glory of Baroque 28,302 full-time equivalent jobs.6 In chestra, the only symphony or- Dresden;15 Maryland, the total economic impact chestra in the United States that » In Texas, in a shower of philan- of the arts industry amounted to an is owned and operated by its thropy this year, the Dallas Mu- estimated $911 million in gross sales, musicians, after disintegrating in seum of Art announced a series $312 million in total employee income 1990 due to financial pressures, of cash gifts and art bequests and 12,792 full-time equivalent jobs ac- came alive as a cooperative in that amounted to $400 million, cording to a study released by the state’s 2002 with a budget of almost $4 while the Houston Museum of Arts Council in 2004.7 Then, in North million, 69 members (expand- Fine Arts increased the estimate Carolina, a study released in 2003 by ing to as many as 90 for special of a gift from its largest bene-

2 | The Economic Impact of the Arts in the South The Economic Impact of the Arts in the South | 3 factor to about $450 million;16 arts agencies were forced to develop were again sent a request on July 26, and innovative strategies to ensure the sur- 2005, and responses were received » During the 2005 legislative ses- vival of essential arts-related activities, from Arkansas, Kentucky, Louisiana, sion of the Virginia General events and projects. As in the 2000 re- Maryland, Mississippi, Oklahoma and Assembly, two senior members port, an important component of this Virginia. On March 17, 2006, the SLC of the state House and Senate report also includes the state-specific received a detailed response from Ala- sponsored legislation propos- sections, which describe some of the bama, portions of which were included ing that the state borrow nearly more significant arts projects under- in the state section. The SLC did not $86 million for arts and cultural taken in the SLC states and, where receive a completed survey response projects.17 Although the legisla- possible, economic impact data such as from Missouri, , Texas tion was unsuccessful, the very employment figures, personal income and West Virginia. The information in fact that these two senior mem- (salary, wages, proprietary income), this report also was based on an ongo- bers of the General Assembly, and government revenue created by ing review of media outlets and media representing both political par- the dollars spent in the state economy documents in the SLC states during ties, sought to promote the arts in the last five years or so. the past few years, feedback from staff by a bond issue that amounted The 2006 report analyzes state ap- in the state legislatures and additional to tens of millions dollars clear- propriations to the arts in fiscal years research. ly demonstrates the importance 2001 through 2005 (emphasizing the It should also be noted that the of this measure. SLC states); details the role of the fed- economic impact information report- While these examples reflect a eral government in supporting the arts ed, mostly in the state specific pages, mere fraction of innumerable artistic during this same period; highlights the will most often be three to four years ventures and arts-related projects that different economic impacts of the arts old. Conducting comprehensive eco- attract visitors from around the region, and arts-related activities at a broad na- nomic impact studies on a statewide country and globe and entice them to tional level; delineates how arts-related basis remains an extremely expensive visit the SLC states, the arts encompass businesses provide significant employ- proposition and, in an era when their a broad array of disciplines, a factor ment in every state; documents alter- funding positions are extremely pre- that further enhances the ripple effect nate funding mechanisms explored by carious, arts agencies often have been of its economic impact. Some of the states and local governments in the unable to devote resources to conduct disciplines under this broad umbrella light of dwindling public and private such studies more regularly. However, include folk arts (methods of building, support for the arts; and describes how the important point is that even though storytelling); dance (folk, ballet, mod- a number of states have embarked on these study results may be dated, they ern); music (folk, blues, Zydeco, jazz, an effort to systematically promote contain valuable information, and it is bluegrass, country, classical, ethnic, cultural heritage tourism and leverage entirely likely that more recent studies contemporary); theater performance the cultural economy as a catalyst for would indicate that the economic im- art (plays, mimes, puppetry); visual arts economic prosperity. pact of the arts currently is even more (drawing, painting, photography, sculp- impressive than reported in the three- ture); crafts (pottery, weaving, basketry, METHODOLOGY and four-year old reports. furniture making, quilting); literature; In order to obtain information to and media (film, video, community ra- publish this report, the SLC, with the dio and television). These disciplines, assistance of the Southern Arts Fed- together with several others, combine eration, forwarded a detailed survey to foster artistic expression, preserve questionnaire to the directors of the certain historic and cultural traditions, state arts agencies/councils in the 16 significantly expand the number of SLC states on March 31, 2005. (See people enjoying different artistic en- Appendix A for a copy of the survey deavors and act as a catalyst for eco- questionnaire). The directors were nomic growth in neighborhoods and requested to forward their detailed 18 communities across the country. responses and any accompanying The major objective of this Spe- material to the SLC by May 2, 2005. cial Series Report is to review how In response to this letter and after the not-for-profit arts sector in the subsequent appeals by the Southern SLC states fared during the recent Arts Federation, by May 16, 2005, fiscal downturn. As indicated, the the SLC received detailed survey re- severity of the fiscal crisis that states sponses from Florida, Georgia and were plunged into resulted in state ap- . By June 27, 2005, the propriations for the arts being slashed SLC received ’s response. quite significantly. Consequently, state The remaining 12 state arts directors

2 | The Economic Impact of the Arts in the South The Economic Impact of the Arts in the South | 3